1.
Clog on Redemption (12 Marks)
Introduction:
A mortgage is a transfer of an interest in specific immovable property for securing the repayment of
a loan or performance of an obligation. One of the most important rights of a mortgagor is the right
to redeem, enshrined under Section 60 of the Transfer of Property Act, 1882. Any attempt to restrict
or take away this right is known as a “clog on redemption” and is void.
Definition and Meaning:
A clog on redemption refers to any stipulation or condition in a mortgage transaction that either
postpones indefinitely, defeats, or makes illusory the mortgagor’s right to redeem the mortgaged
property upon repayment of the mortgage debt.
Legal Principle:
The equitable maxim governing this concept is:
“Once a mortgage, always a mortgage.”
This implies that every mortgage must retain the right of redemption and any attempt to restrict it is
inconsistent with the very nature of a mortgage.
Statutory Basis:
● Section 60, Transfer of Property Act, 1882 provides that the mortgagor has a right to redeem
at any time after repayment of the mortgage money.
● Any agreement contrary to this is void to the extent it restricts redemption.
Judicial Pronouncements:
● Kreglinger v. New Patagonia Meat & Cold Storage Co. (1914) AC 25:
The House of Lords held that a collateral advantage (like an exclusive supply agreement)
will be upheld only if it is not a clog on redemption, and not oppressive or unconscionable.
● Vasudeva Mudaliar v. Srinivasa Pillai (1914) ILR 38 Mad 382:
A stipulation that mortgagor shall not redeem before 99 years was held to be a clog and
declared void.
Examples of Clog on Redemption:
● A condition postponing redemption for an unreasonable duration.
● A clause transferring absolute ownership to the mortgagee on default.
● A stipulation allowing redemption only on additional, burdensome conditions.
Clog vs. Collateral Advantage:
Not every condition is a clog. A collateral advantage may be valid if:
● It is not unfair or oppressive.
● It does not make redemption illusory.
● It ends with the mortgage and is not independent of it.
Conclusion:
The right to redeem is inviolable and forms the heart of a mortgage transaction. Any clause that
takes away or defeats this right is a clog and will be declared void by the courts to protect the
mortgagor’s equitable rights.
2. Right of Foreclosure (12 Marks)
Introduction:
The right of foreclosure is a remedy available to certain mortgagees under the Transfer of Property
Act, 1882. It allows the mortgagee to apply to the court for an order that forever bars the mortgagor
from redeeming the mortgaged property.
Statutory Provision:
● Section 67 of the Transfer of Property Act, 1882 governs the right of foreclosure.
● This right is available only to a mortgagee under a mortgage by conditional sale and not in
cases of simple or usufructuary mortgages.
Definition:
Foreclosure is the legal process by which the mortgagee terminates the mortgagor’s right of
redemption after the mortgage debt becomes due and remains unpaid. It converts the mortgagee’s
interest into absolute ownership.
When Foreclosure May Be Claimed:
● The mortgage is by conditional sale (Section 58(c)).
● The time for repayment has passed.
● The mortgagor has failed to redeem the property.
● The mortgagee files a civil suit in court for foreclosure.
Legal Nature of Foreclosure:
● It is a judicial remedy, not an automatic right.
● Can be exercised only through court.
● The effect is that the mortgagor loses all rights, including the right to redeem.
Limitation Period:
Under Article 61(a) of the Limitation Act, 1963, the limitation period for filing a suit for foreclosure
is 30 years from the date when the mortgage money becomes due.
Judicial Pronouncements:
● Narandas Karsondas v. S.A. Kamtam (1977) 3 SCC 247:
Held that the mortgagee must file a suit to foreclose and cannot take unilateral action.
● Raghunath v. Kedarnath AIR 1969 All 316:
Reaffirmed that only the court can grant foreclosure, and the mortgagee cannot enforce it by
private means.
Foreclosure vs. Sale:
● Foreclosure: The mortgagee becomes absolute owner.
● Sale: The property is sold to recover the debt, and any surplus goes to the mortgagor.
Mortgagee Not Entitled to Foreclosure:
● In usufructuary, English, or simple mortgages, foreclosure is not a remedy.
● These mortgagees can sue for sale of the property instead (Section 67, proviso).
Conclusion:
The right of foreclosure is a powerful remedy conferred only on a limited category of mortgagees. It
extinguishes the mortgagor’s equitable right to redeem. However, it is subject to strict judicial
scrutiny and must be exercised within the statutory framework to avoid misuse.
